Oil prices have increased following a drop in the US crude stockpiles and over signs of easing trade tensions between the US and China.

Brent crude oil futures LCOc1 rose by 21 cents a barrel, or 0.4%, to trade at $60.36 while US West Texas Intermediate (WTI) crude futures CLc1 increased by ten cents, or 0.2%, to reach $51.25, Reuters reported.

On 12 Wednesday, Beijing made its first major US soybean purchases in more than six months, triggering hopes of a trade deal and a rally across stock markets.

Oil prices were also supported by a decrease in US crude stocks. US crude inventories USOILC=ECI declined by 1.2 million barrels last week.

“Rising US output, weaker economic growth and the production cut agreement roll-off will see a balanced market in H2.”

Analysts also opined that the supply cuts announced by producer cartel OPEC and other suppliers last week would stabilise the supply-demand balance next year.

ANZ analyst Daniel Hynes was quoted by the news agency as saying: “The agreement of a reduction in output of 1.2 million barrels per day (Mbpd) at last week’s OPEC meeting should see the market push into (supply) deficit in H1 2019.

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“Rising US output, weaker economic growth and the production cut agreement roll-off will see a balanced market in H2.”

ANZ expects Brent futures to reach $75 a barrel in the first quarter of next year.

A further rise in prices was capped after OPEC decreased its 2019 demand forecast by 100,000bpd to 31.44Mbpd.

The revised demand forecast adds to fears expressed by several analysts that OPEC-led production cuts might not be enough to remove supply glut and support prices.

Meanwhile, US crude production C-OUT-T-EIA hit a record 11.7Mbpd.